Minister of Energy: paradox but occupation isn’t over in energy industry

DELFI / Karolina Pansevič

“We have a strong electrical energy infrastructure and it is simply paradoxical that it is controlled from a control room in Moscow and that that occupation of our energy industry has not ended,” he said in an interview with Delfi.

Having worked as the Lithuanian attaché in Brussels, Vaičiūnas promised to not give up in regards to the nuclear power plant being constructed in Astravyets and identified continuity as one of the core foci of his work.

The minister stated that he intends to work for his full term, despite discussions of the Ministry of Energy being abolished.

“We have to consider that our work also needs political weight,” he argued against the merger with the Ministry of Economy.

Rokas Masiulis presented a renewed National Energy Independence Strategy at the end of his term. Do you see any flaws in it? Perhaps something should be changed?

In terms of content the recommendations are truly valuable. It is a good basis to continue work on renewing the strategy. In terms of form, the document should be broader and more detailed, but I have no fundamental changes in mind.

Of course I would have to review some accents in more detail, perhaps regarding energy efficiency. But overall I think it is correct and continuity has been our core interest in the energy infrastructure for the past few years, as well as the implementation of projects and aims, these recommendations are suited to that vision.

– The strategy outlines that the Visaginas NPP project is to be frozen. You were one of the officials related to its implementation. Are you not disappointed for the effort wasted?

We deal with the situation every day and review circumstances. This project was regional from the very begining and, as a participant of the process, I can say it was not easy. We had fairly decent starting positions because we managed to attract a strategic investor (Hitachi – Delfi), which would have even invested its own capital. But currently the market situation and opportunities are not favourable for such a project.

Am I disappointed? Every task we work on gives some sort of value and we did much work with our regional partners. The fundamental problem is that as a Baltic States region we have the same regional market creation goals, but given the structure of the energy balance, the relation of import to local production, the situations of the three Baltics are fairly different. Lithuania depends on import the most, Estonia exports electricity, while Latvia has a great amount of renewable energy resources.

– The strategy also mentions purchasing the liquefied natural gas terminal “Independence”. Do you support such a move?

The terminal has been operating for two years. This year will be historical due to us importing more gas through the terminal than through pipelines from Gazprom. Both in Lithuania and the entire region it is acknowledged as a success story. The terminal has definitely helped ensure a competitive price for consumers.

Looking at perspectives, we have the ship rented till 2024 and the strategic interest of Eropean Union states is to have supplies through at least three different sources. We are talking about the LNG terminal, at the end of 2021 we will have a gas link with Poland and then there is the traditional link with Gazprom.

Looking strategically and reviewing the prospects of the LNG market, with prices expected to decrease, this source should be competitive. The pursuit of a long term solution will definitely be beneficial – be it purchasing, be it creating a common company with regional partners, these are open questions. That the terminal should persist past 2024 is, I believe, fairly rational, considering contemporary prospects.

– Why do you call “Independence” a success story?

Because in our monopolistic gas market it ensured an alternative supply, which allowed to reduce gas prices both for industry and private individuals.

– It just so happened that just at the same time when the terminal floated into Klaipėda, oil prices dropped significantly, gas prices following after. Currently analysts predict that the prices of these resources are programmed to rise. Could this hurt the terminal’s appeal?

I am talking about the long term perspective because currently in the world market the situation is such that the number of LNG supplies and their capacities are increasing. Furthermore, the LND market always has an extra component (in terms of technology), but that competition is one of the core elements of seeking to decrease gas prices.

Speaking of relations with oil prices – yes, in the intermediate term some fluctuations are possible, but in the long term LNG is one of the means of balancing the price as favourably for consumers as possible.

– Some experts say that Lithuania has “sat down on the gas needle”. Is it wise to direct the Lithuanian energy infrastructure toward fossil fuels and not renewables?

Energy infrastructure is concerned with balance to a great extent. It just so happens that historically gas makes for negative associations due to them being supplied from a sole monopolistic supplier. We have to understand that in the entire world gas is seen as the cleanest fuel in the transition to renewables, which need to be balanced because they cannot ensure the system alone.

We should not contrast, but instead look for synergy with these resources – how one fuel can encourage another. In the long term perspective, yes, renewables are a sphere with good prospects, with decreasing capital investment and operational expenses.

– As far as I know the Lithuanian infrastructure in apartment blocks, in their boiler rooms, is adapted to specifically gas.

Yes, the infrastructure has historically been geared toward gas resources. Considering strategic goals we are looking into how to replace it as much as possible with biomass and bio fuels. We cannot make sudden changes. This is a question of prices and investment, where we have to use EU structural funds to ensure that the transition as customer friendly as possible.

– After meeting the President you said that you see two main questions in the state energy infrastructure – synchronisation with European networks and Astravyets NPP. Starting with the first – what tasks are planned for the near future?

Firstly work is currently on the political front. There is need for a number of political agreements because the project has two components – one – political and one technological.

Disconnecting from the Belarus, Russia, Estonia, Latvia and Lithuania (BRELL) system is already included in the European agenda, meaning that the European Commission is taking care of it as well.

The first task is to choose a synchronisation scenario, of which there are three. The Baltics could work under the so-called autonomous regime and create their own synchronous zone The second scenario is synchronisation with the Northern countries and the third – with continental European links through Poland.

Currently a study is concluding, which will help make a political decision on costs and reliability, which scenario is the most rational.

This is planned for the end of Q1 in 2017 or the start of Q2.

After choosing the scenario we will need to begin negotiations on disconnecting from BRELL and preparing an action plan, at what pace will we implement specific technical project – the necessary links, converters and such. By the way, we will be negotiating with Russia and Belarus in the name of the whole EU.

– Tensions could appear here?

Tensions are natural. The question is not technical, but one of security and electrical energy reliability. We have a strong electrical energy infrastructure and it is simply paradoxical that it is controlled from a control room in Moscow and that that occupation of our energy industry has not ended. Network control still belongs to Russia.

However I think that Russia understands our decision to disconnect from BRELL perfectly well, but I would rather not speculate how the negotiations will go.

– Realistically, can Lithuania do anything at all about the power plant in Belarus?

Regarding the Astravyets question, our greatest goal is that if it is impossible to halt the project, then we have to make sure the highest nuclear energy and environmental protection standards are upheld. For now we have justified doubts and are seeking to use all the instruments of international influence available to us, both the International Atomic Energy Agency, as well as the European Commission.

– Do you have an explanation why the Belarussians are not keen on supervision?

Responsibility for the security of such objects primarily goes to the organisations that regulate them. In Lithuania it is the State Atomic Energy Security Inspection, the Belarussians have their own. One of our greatest concerns is that their regulator would be fully independent and would have adequate competence to ensure security.

There is a fairly long history of our (non)cooperation with Belarus. We have always asked for transparency, openness and dialogue, unfortunately meetings only began recently. So far from Belarus we would only receive partial responses and as a neighbouring country we understand that such questions have to be coordinated, but as for reasons why the unwillingness to allow inspectors in, I cannot say.

– After the elections the idea of abolishing the Ministry of Energy sounded out. But this is probably not the goal in itself. What is the real purpose of this?

We are talking about a general public sector reform, about work efficiency, that all functions would be based on as low expenses as possible. Speaking of the ministry, it is most important to review the demand for it based on current goals. We have fairly many of them right now, so I believe the ministry is necessary.

Earlier there were discussions of attaching the Ministry of Energy under that of economy, but it is necessary to consider that our work requires political weight as well. The ministry was firstly established to accomplish strategic goals because with political weight it is far easier to accomplish them. I am talking not of participating in cabinet meetings in a separate chair, but the international level – meetings with regional partners, participating in EU formats, negotiations with the European Commission.

Furthermore the government programme is ambitious – the development of small energy, expanding the capacity of energy consumers to become producers, raising energy efficiency, thus in the energy infrastructure we have to not only accomplish continued goals, but also new tasks. Specifically based on them should we view the ministry’s perspectives.

– As far as I understand you are intent to be a minister the entire term, but do you have an alternative plan if the Minister of Economy takes over all functions?

I will work as much as I am tasked. I have goals and will seek to accomplish them. I am definitely not considering any alternative plans.

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